RETAIL PERFORMANCE MONITOR
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Target Sues Target
US retailing giant Target, Inc. filed suit against Canadian retailer Fairweather Ltd. for using the name Target Apparel for its 15 stores. US Target seeks exclusive rights to the name Target and a preliminary injunction against Fairweather. This is the latest legal skirmish in a decade-long battle and also includes a complaint against Target Apparel's use of an allegedly too-similar bullseye logo. Fairweather countersued for exclusive rights to the name and $250 million in damages.
JCPenney $1.25 Billion Credit
JCPenney Company, Inc. completed a new five-year $1.25 billion bank credit facility maturing in April 2016, replacing a $750 million credit facility that was scheduled to mature in April 2012. The new facility may be used for general corporate purposes and is secured by the Company's inventory, which can be released upon attainment of certain credit rating levels.
Metropark USA Files for Bankruptcy
Retail chain Metropark USA, Inc. filed for Chapter 11 bankruptcy on May 2, 2011 with the goal of finding a buyer. The company, with 69 stores in 21 states, listed $10 million in assets and $50 million in debts.
7-11 Buys Wilson Farms Chain
7-Eleven, Inc. acquired Wilson Farms, a convenience store chain based in Buffalo, NY with 188 stores, from WFI Group, Inc. for undisclosed terms. The move will strengthen 7-Eleven presence in western New York state. 7-Eleven currently operates, franchises or licenses in more than 8,400 7-Eleven stores in North America. Globally, there are more than 40,500 7-Eleven stores in 16 countries. The deal is expected to be completed in the second quarter 2011.
Publix 1st Quarter
Publix reported net earnings for the first fiscal quarter ended March 31, 2011 of $398.2 million, up from net earnings of $364.4 million for the same quarter year earlier, on net sales of $6.8 billion, up from $6.5 billion a year earlier. Effective May 1, 2011, Publix’s stock price increased from $20.90 per share to $21.65 per share. Publix stock is not publicly traded and is made available for sale only to current Publix associates and members of its board of directors.
EBay 1st Quarter
EBay, Inc. reported net income for the first quarter ended March 31, 2011 of $475.865 million, up from net income of $397.653 million for the same quarter a year earlier, on net revenues of $2.546 billion, up from $2.196 billion year earlier. EBay expects net revenues for the second quarter 2011 to be in the range of $2.550 to $2.650 billion with GAAP earnings per diluted share in the range of $0.36 to $0.37 and non-GAAP earnings per diluted share in the range of $0.45 to $0.46. For the full year 2011, the company expects net revenues in the range of $10.60 to $10.90 billion with GAAP earnings per diluted share in the range of $1.53 to $1.58 and non-GAAP earnings per diluted share in the range of $1.93 to $1.97.
OfficeMax 1st Quarter
OfficeMax, Inc. reported net income for the first quarter ended March 26, 2011 of $11.366 million, down from net income of $24.779 million for the same quarter year earlier, on sales of $1.863 billion, down from $1.917 billion year earlier. Comparable store sales decreased 1.2% for the quarter. OfficeMax ended the first quarter of 2011 with a total of 991 retail stores, consisting of 912 retail stores in the US and 79 retail stores in Mexico. During the first quarter of 2011, OfficeMax closed six retail stores in the US.
VF 1st Quarter
VF Corp. reported net income for the first fiscal quarter ended March 31, 2011 of $200.703 million, up from net income of $163.516 million for the same quarter a year earlier, on net sales of $1.937 billion, up from $1.730 billion a year earlier. The company increased its 2011 guidance with revenues now expected to rise approximately 10% in 2011, up from previous guidance for an increase of 8% to 9%, due largely to the impact of a weaker dollar in translating foreign currencies, as well as broad-based strength across its businesses. Earnings per share are now anticipated to increase to $7.25, up from their previous guidance of $7.00 to $7.10 per share. The new guidance includes the $.11 in special items reported in the first quarter, as well as an increase of $.10 per share from foreign currency translation. Cash flow is expected to again reach $1 billion in 2011.
Sears Holdings 1st Quarter Outlook
Sears Holdings Corp. reported combined comparable store sales for the first fiscal quarter ended April 30, 2011 for its Kmart and Sears stores fell 3.6%, primarily due to drop in sales of appliances, apparel, and consumer electronics. Sears Canada expects to report a comparable store sales decline of 9.2% for the quarter. Sears expects a net loss attributable to Holdings' shareholders for the first quarter ended April 30, 2011 of between $145 million and $195 million, or between $1.35 and $1.81 per diluted share. In the first quarter of fiscal 2010, we reported net income attributable to Holdings' shareholders of $16 million, or $0.14 per diluted share. Beginning with the first quarter of 2011, Sears included internet sales from sears.com and kmart.com shipped direct to customers in comparable store sales.
During the first quarter, Sears repurchased 1.2 million common shares at a total cost of $101 million, an average price of $81.61 per share, under its share repurchase program. As of April 30, 2011, the company had $86 million of remaining authorization under its common share repurchase program. It also approved the repurchase of up to an additional $500 million of the company's common shares, which is in addition to the $86 million worth of remaining authorization.
GSI Commerce 1st Quarter
GSI Commerce, Inc. reported net loss for the first quarter ended April 2, 2011 of $13.6 million, worse than the net loss of $8.1 million for the same quarter a year earlier, on net revenues of $323.5 million, up from $272.6 million year earlier.
Overstock.com 1st Quarter
Overstock.com, Inc. reported net loss for the first quarter ended March 31, 2011 of $454,000, worse than the net income of $3.716 million for the same quarter a year earlier, on net revenue of $265.470 million, up slightly from $264.330 million a year earlier.
Drugstore.com 1st Quarter
Drugstore.com, Inc. reported a net loss for the first quarter ended April 3, 2011 of $3.183 million, worse than the net loss of $2.616 million for the same quarter a year earlier, on net sales of $128.44 million, up from $110.93 million year earlier.
Cabela's 1st Quarter
Cabela's, Inc. reported net income for the first quarter ended April 2, 2011 of $17.785 million, more than double its net income of $8.091 million for the same quarter a year earlier, on sales of $586.711 million, up from $559.610 million a year earlier. Comparable store sales increased 8.9% for the quarter.
Ideeli.com Lands $41 Million
Ideeli.com raised $41 million in venture capital financing from a number of investors, including Constellation Growth Capital, Cue Ball Capital, Next World Capital, Kodiak Venture Partners and StarVest Partners, according to Reuters. Ideeli.com is a flash sale website that offers designer goods, including overstock and samples from Calvin Klein, Tommy Hilfiger, and Nicole Miller at heavily discounted prices in private sales that typically last only a day or two. Annual sales are expected to be $150 million.
Gymboree 4th Quarter and Year
Gymboree Corp. reported net loss of $47.3 million for the fourth quarter ended January 29, 2011, worse than net income of $33.2 million for same quarter last year, on net sales of $318.0 million, up 6.2% from $299.6 million a year ago. Comparable store sales decreased 2% for the quarter. For the year ended January 29, 2011, the company reported net income of $28.52 million, down from net income of $101.92 million from a year ago, on net sales of $1.074 billion, up 5.9% from $1.015 billion a year earlier. Comparable store sales also decreased 2% for the year. As of April 2, 2011, the Company operated a total of 1,074 retail stores.
Liz Claiborne 1st Quarter
Liz Claiborne, Inc. reported net loss for the first quarter ended April 2, 2011 of $96.345 million, worse than net loss of $72.038 million for the same quarter year earlier, on net sales of $513.24 million, down from $584.16 million a year earlier.
Nash Finch 1st Quarter
Nash Finch Co. reported net earnings for the first quarter ended March 26, 2011 of $7.481 million, down from net earnings of $7.941 million for the same quarter year earlier, on sales of $1.10 billion, down from $1.18 billion year earlier. Total debt at the end of the first quarter of 2011 increased by $23.3 million to $337.7 million since the end of fiscal 2010. The company continues to focus on effectively managing its balance sheet and is currently in compliance with all of its debt covenants. The debt leverage ratio as of the end of the first quarter 2011 was 2.43x. Availability on the company’s revolving credit facility at the end of the quarter was $151.6 million.
Carter’s 1st Quarter
Carter’s, Inc. reported net income for the first quarter ended April 2, 2011 of $32.123 million, down from net income of $42.825 million for the same quarter a year earlier, on sales of $469 million, up from $409 million year earlier. The company expects net sales for the second quarter of fiscal 2011 to be up approximately 16% to 19%, and diluted earnings per share to be approximately $0.10 to $0.14 compared to $0.32 in the second quarter of last year.
Revlon 1st Quarter
Revlon, Inc. reported net income for the first quarter ended March 31, 2011 of $10.4 million, up from net income of $2.2 million for the same quarter ayear earlier, on net sales of $333.2 million, up from $305.5 million year earlier. On March 17, 2011, the company acquired certain assets, including trademarks, other intellectual property, inventory, certain receivables, and manufacturing equipment related to Sinful Colors cosmetics, as well as other brands, which products are sold principally in the US mass retail channel.
Elizabeth Arden 3rd Quarter
Elizabeth Arden, Inc. reported net loss for the fiscal third quarter 2011 ended March 31, 2011 of $3.251 million, better than net loss of $3.856 million for the same quarter a year earlier, on net sales of $231.296 million, up from $217.026 million a year earlier. During the third fiscal quarter, the company refinanced its long-term bonds and amended and extended its bank credit facility. Through this refinancing, the company extended the maturity of its debt structure and added additional long-term capital with minimal impact to the company's borrowing costs. Elizabeth Arden incurred a pre-tax charge of $6.5 million during the quarter related to this refinancing. The company affirms its prior annual net sales and earnings guidance for fiscal 2011 and anticipates a net sales increase of 5.0% to 6.0%, as compared to the prior fiscal year, and earnings to be in the range of $1.40 to $1.50 per diluted share.
Jean Coutu 4th Quarter and Year
Jean Coutu Group, Inc. reported net earnings of C$46.4 million (Canadian) for the fourth quarter ended February 26, 2011, up from net earnings of C$42.8 million for same quarter last year, on revenues of C$655.6 million, up from C$637.0 million year ago. For the year ended February 26, 2011, the company reported net earnings of C$179.1 million, up from net earnings of C$162.7 million from year ago, on revenues of C$2.598 billion, up from C$2.543 billion year earlier. The Board of the Jean Coutu Group declared a quarterly dividend of $0.06 per share, an increase of 9.1% compared with the previous quarter. This dividend will be paid on May 28, 2011 to all holders of Class A subordinate voting shares and holders of Class B shares listed in the corporation's shareholder ledger as of May 14, 2011. This quarterly dividend represents $0.24 per share on an annual basis.
West Marine 1st Quarter
West Marine, Inc. reported net loss for the first quarter ended April 2, 2011 of $12.345 million, worse than net loss of $9.532 million for the same quarter a year earlier, on net revenues of $113.8 million, up from $109.6 million a year earlier. Comparable store sales increased 2.7% for the quarter. CEO Geoff Eisenberg noted the main boating season may be stronger than originally anticipated, and thus the company raised its 2011 sales guidance for full-year 2011 net revenues to range from $634 million to $640 million, compared to $623 million in actual net revenues last year.
Barnes & Noble Credit Amendment
Barnes & Noble, Inc. entered into an amendment that extends its $1 billion revolving credit agreement's previous maturity date from September 29, 2013 to April 29, 2016 and lowers interest costs, provides greater financial flexibility, and increases overall borrowing capacity throughout the year. As a result of the amendment, the company will write-off $6.4 million in deferred financing fees from the previous facility in fiscal 2011. Beginning in fiscal 2012, the company expects lower interest costs and reduced amortization of deferred financing fees to reduce interest expense by $10.6 million annually. The company ended fiscal year 2011 on April 30, 2011 with $313 million of outstanding borrowings under the facility.
Jones Group Credit
The Jones Group Inc. completed an amendment and extension of its $650 million senior credit facility that provides for a decrease in fees and interest rates to current market rates and an extension of the maturity date to April 28, 2016. In addition, the agreement expands the credit facility's international commitment to allow for the inclusion of European borrowers which can draw under the credit facility. The credit facility is primarily used as backing for the issuance of trade letters of credit and other supply chain purposes, but also may be used for working capital and general corporate purposes. Currently, no cash borrowings are outstanding under the existing facility.
Station Casinos Ballot Summary Filed
Station Casinos filed with the US Bankruptcy Court on April 29, 2011 a ballot summary and declaration in support of confirmation of the Company's Joint Plan. According to documents filed with the Court, 100% of those voting in Classes CVH.1 (land loan lenders' claims) and SCI Opco (pre-petition Opco secured lenders' allowed secured claims) and 99.82% of CVRG.2 (GVR first lien claims) voted to accept the Plan. The Court is scheduled to consider the Plan on May 25, 2011.
Ultimate Electronics Conversion Sought
Ultimate Acquisition Partners, aka Ultimate Electronics, filed with the US Bankruptcy Court on April 29, 2011 a motion to convert the Chapter 11 reorganization case to Chapter 7 liquidation status.
Ingles Markets 2nd Quarter
Ingles Markets, Inc. reported net income for the second fiscal quarter ended March 26, 2011 of $7.722 million, up from net income of $5.595 million for the same quarter a year earlier, on net sales of $870.371 million, up from $837.005 million year earlier. Comparable store sales (excluding gasoline) increased 1.9% for the quarter. For the six months ended March 26, 2011, the company reported net income of $15.374 million, up from net income of $11.612 million for the same half year ago, on net sales of $1.743 billion, up from $1.678 billion year earlier.
MarineMax 2nd Quarter
MarineMax, Inc. reported a net loss for the second fiscal quarter ended March 31, 2011 of $4.487 million, better than net loss of $6.338 million for the same quarter year earlier, on net sales of $115.756 million, up from $110.116 million year earlier. Comparable store sales increased 5% for the quarter. For the six months ended March 31, 2011, the company reported net loss of $9.189 million, worse than net income of $3.815 million for the same half year ago, on net sales of $207.946 million, down slightly from $210.565 billion year earlier. Comparable store sales decreased 1% for the quarter.
Avon 1st Quarter
Avon Products, Inc. reported net loss for the first quarter ended April 2, 2011 of $143.6 million, much worse than net income of $42.5 million for the same quarter year earlier, on net revenues of $2.592 billion, up from $2.417 billion year earlier. Total units sold declined 1%, while price/mix rose 5% during the quarter. Active representatives declined 1% in the quarter.
RadioShack Credit
RadioShack Corp. completed the issuance of $325 million aggregate principal amount of its 6.750% Senior Notes due 2019 in a private placement. The notes will pay interest semi-annually at a rate of 6.750% per annum and are unsecured obligations of RadioShack. Interest expense associated with the notes is expected to total approximately $15.2 million ($9.3 million after tax or $0.09 per diluted share) in 2011. In March, the company redeemed its $307 million, 7.375% notes that would have matured on May 15, 2011.
Walgreens April
Walgreens Co. reported April sales of $5.99 billion, an increase of 5.5% from $5.68 billion for the same month in 2010. Comparable store front-end sales increased 6.5% in April, benefiting from this year’s later Easter holiday. Customer traffic in comparable stores increased 2.3%, while basket size increased 4.2%. As of April 30, Walgreens operated 8,169 locations in all 50 states, the District of Columbia, Puerto Rico and Guam.
HSN 1st Quarter
HSN, Inc. reported net income for the first quarter ended March 31, 2011 of $20.281 million, up from net income of $17.653 million for the same quarter year earlier, on net sales of $723.982 million, up from $683.213 million year earlier.
Bon Chance, Pierre
According to a Wall Street Journal article, Pierre Cardin wants to sell his fashion design and licensing business for a cool 1 billion euros ($1.46 billion). How did he come up with the E1 billion figure? He said E10 million per product times 1000 products times 100 countries equals E1 billion. He previously offered it for E500 million with no takers, but bankers guess it is worth only about E200 million. However, that is only a guess because of a lack of hard financial information, and bankers contend due diligence may prove to be a nightmare. Still, with 400 licensed products plus fashion, the current climate of offering exclusive products at retail may prove irresistible to a retailer with deep pockets, even if the price produces hesitation.
Stop and Scan
Stop & Shop became one of the first major companies to deploy a custom version of Modiv Media's iPhone app called Scan It, according to MIT Technical Review, with a version for Android phones in the works.
Scan It allows shoppers to use their smartphones to scan the bar codes of items to keep a running tally. Customers bag their items while shopping and present the smartphone total at checkout, thus avoiding having to empty their cart and then bag their groceries. In addition, the app uses data from the loyalty card to present offers based on the user's past purchases and current location in the store. It works in addition to the existing loyalty program, offering savings on top of the deals already advertised on store shelves.
Modiv claims customers save time and get personalized deals while retailers can entice customers with more effective offers and can employ fewer cashiers. Stop & Shop is deploying the app as a pilot program in certain stores. So far, the retailer uses an honor system to make sure every item in the cart was actually scanned.
COMP STORE SALES
March sales were strong. Will the trend continue? Find out by reading the nationally recognized. Bernard Sands General Merchandise Comp Store Sales Analysis. Keep track of comparable and total sales growth in our detailed, easy-to-read format. Learn more about subscribing.
CREDIT AND ECONOMY WATCH:----------------------------------
Retail Sales Fall
The International Council of Shopping Centers and Goldman Sachs reported its chain-store sales index for the week ending on April 30, 2011 fell 0.8% compared to the prior week. Sales during the final fiscal week of April were negatively impacted by tornadoes across six states--and power outages and store closures--and bouts of heavy rainfall extending up through New York--which curbed the consumers’ ability to shop in some regions while rising gasoline prices affected the consumers’ ability to spend.
Gas Prices Rise...Again
The Energy Department announced that for week ending May 2, 2011, the average price of U.S. gasoline rose to $3.963 a gallon, up from $3.879 per gallon week earlier. Besides yet another weekly rise, the average also blew past earlier projections of averaging $3.86 per gallon during the 2011 driving season and peaking at about $3.91 per gallon by mid summer.
Diesel prices fell to an average $4.10 per gallon, down from $4.11 last week. Like gasoline prices, diesel fuel prices exceeded earlier projections to average $4.09 per gallon this summer.
Retail Sales Plummet
For the week ended April 30, 2011, ShopperTrak's National Retail Sales Estimate was $83.808 billion, down 16.9% from last week's $101.231 billion, and off 6.1% from same week in April 2010. As expected, it was a quiet week prior to the ramp up for the week before Mother's Day, exacerbated by killer tornadoes in the SouthEast US and rising gas prices.
Mortgage Rates Dip
Bankrate.com reported that the average conforming 30-year fixed mortgage rate fell to 4.95%, down from last week's 4.96%, according to its weekly national survey ending April 27, 2011. It also reported that the average conforming 15-year fixed mortgage rate was 4.14%, down from 4.16% last week.
April 2011 Help Wanted
The Conference Board Employment Help Wanted Online Index decreased in April, with online advertised vacancies falling by 123,800 to 4.322 million, after a strong gain of 763,100 in the first quarter of 2011. Labor demand in April is in line with levels last seen four years ago before the start of the recession, although approximately 13.5 million people remain unemployed in the US.
March 2011 Employment Trends
The Conference Board Employment Trends Index increased in March for the sixth consecutive month. The index now stands at 100.9, up from February’s revised figure of 100.3. The index is up over 8% from a year ago.
April Consumer Confidence Gains
The Conference Board announced Consumer Confidence increased in April 2011 to 65.4, up from 63.4 in March 2011, a three-year high. Analysts noted consumers' short-term outlook improved, although rising inflation causes some concern.
March Inventories
The US Commerce Department reported inventories of manufactured durable goods in March 2011, up fifteen consecutive months, increased $4.5 billion or 1.4% to $334.3 billion, revised from the previously published 1.3% increase. This followed a 1.3% February increase. Inventories of manufactured nondurable goods, up seven consecutive months, increased $1.8 billion or 0.8% to $238.1 billion. This followed a 0.6% February increase. New orders for manufactured goods in March, up five consecutive months, increased $13.5 billion or 3.0% to $462.9 billion, which followed a 0.7% February increase.
March Construction
The US Commerce Department reported construction spending during March 2011 was estimated at a seasonally adjusted annual rate of $768.9 billion, 1.4% above the revised February 2011 estimate of $758.6 billion, but 6.78% below the March 2010 estimate of $824.0 billion. During the first 3 months of this year, construction spending amounted to $161.2 billion, 7.8% below the $174.8 billion for the same period in 2010.
March Retail Sales
The US Commerce Department reported that March 2011 retail sales increased 0.4%, the ninth consecutive gain, although the rise was only 0.1% if gasoline sales were excluded. The biggest loser, auto sales, fell 1.7%, the largest drop since February 2010. On the positive side, furniture store sales rose 3.6% from February. More jobs and a payroll tax cut are expected to continue the spending rebound.
February Home Prices Drop
The Standard & Poor's/Case-Shiller composite index of 20 metropolitan areas decreased 3.3% in February 2011 from the month before. Analysts noted little good news in housing, with prices falling and new sales and construction disappointing. Atlanta, Cleveland and Las Vegas join Detroit as cities with home prices below 2000 levels, with Phoenix barely above its January 2000 pricing level. Washington DC is the only bright spot as home prices rose 2.7% in February over January.
March Home Sales Increase
According to the National Association of Realtors, existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, increased 3.7% to a seasonally adjusted annual rate of 5.10 million units in March 2011 from an upwardly revised 4.92 million units in February. Although good news, the numbers are still 6.3% below the 5.44 million unit pace in March 2010.
According to the US Census Bureau and US Department of Housing and Urban Development, sales of new single-family houses in March 2011 were at a seasonally adjusted annual rate of 300,000, up 11.1% above the revised February rate of 270,000, but 21.9% below the March 2010 estimate of 384,000. The median sales price of new houses sold in March 2011 was $213,800, and the average sales price was $246,800. The seasonally adjusted estimate of new houses for sale at the end of March was 183,000, representing a supply of 7.3 months at the current sales rate.
Pending Home Sales
The National Association of Realtors' Pending Home Sales Index, a forward-looking indicator, rose 5.1% to 94.1, based on contracts signed in March, from 89.5 in February. That is the good news. The bad news is that the index is 11.4% below 106.2 recorded in March 2010, so there is considerable room for recovery. The data reflects contracts and not closings, which normally occur with a lag time of one or two months. NAR analysts predict modest near-term gains in existing-home sales are likely, which would be even stronger if tight mortgage lending criteria returned to normal, safe standards.
Consumer Spending Up In March
According to the US Commerce Department Bureau of Economic Analysis, personal consumption expenditures increased $60.7 billion, or 0.6%, in March 2011. Personal income increased $67.0 billion, or 0.5%, and disposable personal income rose $64.4 billion, or 0.6%.
Private wage and salary disbursements increased $18.0 billion in March. Goods-producing industries' payrolls increased $6.2 billion. Manufacturing payrolls increased $5.1 billion. Services-producing industries' payrolls increased $11.8 billion. Government wage and salary disbursements increased $1.2 billion.
Personal saving was $651.2 billion in March, compared with $647.5 billion in February, with personal saving as a percentage of disposable personal income remaining steady at 5.5%. In general, more people went back to work, boosting spending.
Retail Sales Forecast For 2011
The National Retail Federation said it expects U.S. retail sales (which excludes online sales, cars, gasoline, and restaurants) will rise 4% in 2011, but warned that reluctance of small businesses to add employees and higher gasoline prices could yet slow consumer spending. NRF noted US retail sales were up 5.7% during the 2010 holiday period, better than the 3.3% it had predicted.
Spend It On Mom
According to the NRF’s 2011 Mother’s Day Consumer Intentions and Actions survey, conducted by BIGresearch, the average person celebrating Mother's Day is expected to spend $140.73 on gifts, up from $126.90 last year, and a return to 2008 spending levels. Total spending in the US is expected to reach $16.3 billion.
But what to get? Jewelry will be a popular gift option, with 31.2% planning to buy mom silver, gold, or diamonds (up 19% from last year), with total spending on jewelry expected to reach $3.0 billion. And 31.8% will buy mom clothing or accessories ($1.3 billion total), 54.7% will treat mom to a nice dinner or brunch ($3.1 billion), and 64.9% will buy mom flowers ($1.9 billion).
BANKRUPTCIES:---------------------------------------------------------
Below are some of the major retailers that have sought bankruptcy protection over the past year:
Metropark USA: Filed for Chapter 11 bankruptcy on May 2, 2011. The company, with 69 stores in 21 states, listed $10 million in assets and $50 million in debts.
Sbarro: Filed for Chapter 11 April 4, 2011. Sbarro reached an agreement with all of its second-lien secured lenders and approximately 70% of its senior noteholders on the terms of a reorganization plan that will eliminate approximately $200 million of debt. The company is seeking Court approval to enter into a $35 million debtor-in-possession financing agreement it has secured with certain of its existing first-lien lenders. Sbarro's first lien lenders are not parties to the restructuring agreement, and the company is in ongoing discussions with these lenders regarding the terms of proposed exit financing. MidOcean Partners III LP and Ares Corporate Opportunities Fund II LP have agreed to backstop a $30 million rights offering, the proceeds of which will be used to repay the DIP and provide the reorganized business with additional equity capital and liquidity. Sbarro filed motions with the Court on April 19 to retain Epiq Bankruptcy Solutions (Contact: Jason D. Horwitz) as administrative agent at hourly rates ranging from $34 to $250; PricewaterhouseCoopers (Contact: Perry Mandarino) as bankruptcy consultant, independent auditor, tax consultant and international tax advisor at the following hourly rates: partner at $800, director at $550, manager at $450, senior associate at $350, associate at $250 and paraprofessional at $200; Curtis, Mallet-Prevost, Colt & Mosle (Contact: Steven J. Reisman) as conflicts counsel at the following hourly rates: partner at $730 to $830, counsel at $510 to $625, associate at $300 to $59, paraprofessional at $190 to $230, managing clerk at $450 and other support personnel at $55 to $325; and Cadwalader, Wickersham & Taft (Contact: Dennis J. Block) as counsel to the restructuring committee at hourly rates of ranging from $35 to $995.
Harry & David Holdings, Inc.: Filed for Chapter 11 on March 28, 2011. US Bankruptcy Court approved Harry & David Holdings' 'first day' motions allowing the company to continue day-to-day operations, including approval to access its $100 million first-lien debtor-in-possession revolving credit facility provided by the company's secured lenders, and a $55 million second-lien DIP term loan provided by holders of the Company's senior notes. The company also received approval to continue to pay employees' salaries, wages and benefits in the ordinary course, and the Court confirmed the company's ability to pay vendors for post-petition goods and services. In addition, the company received approval to allow all customer programs to continue uninterrupted, including its Fruit-of-the-Month Club and gift cards. The US Trustee also filed a motion appointing a seven-member unsecured creditors committee. The committee members are: Craig Yamaoka of Pension Benefit Guaranty Corp., David R. Wiedwald of Convergys Customer Management Group Inc., Dan Pevonka of RR Donnelley, Peter DeRosa of American List Counsel Inc., Ronald M. Tucker of Simon Property Group, Inc., Robert E. Bernosky of Marich Confectionery Assoc. and James Lewis, representing indenture trustee Wells Fargo. Harry & David Holdings' official committee of unsecured creditors filed an objection to the Debtors' motions for orders approving and assuming a backstop stock purchase agreement and authorizing the Debtors to distribute an accredited investor questionnaire to their unsecured creditors. The creditors also objected to approving procedures related thereto and setting the rights offering record date.
No Fear Retail Stores, Inc.: Filed for bankruptcy protection on February 24, 2011.
Dumoulin: Filed for bankruptcy on February 23, 2011. Owns 15 corporate stores and 89 stores owned by franchisees. Seeks to close its US business affiliate and six corporate stores. Its 89 franchise stores are not going into bankruptcy.
Borders Group Inc.: Filed for Chapter 11 bankruptcy on February 16, 2011. On March 17, 2011, the US Bankruptcy Court signed a final order authorizing Borders Group to obtain DIP financing from GE Capital, Restructuring Finance. As previously reported, the financing consists of a $410 million revolver, a $55 million term loan B, and two $20 million letter of credit facilities. The funds will be used, among other things, to pay vendors, publishers and other suppliers for post-petition goods and services and to operate its day-to-day business. Also, Borders increased the number of store closing from 200 to 228. The US Trustee assigned to the Borders Group case filed with the US Bankruptcy Court an objection to the Debtors' motion for approval to implement a Key Employee Incentive Program and pay $8 million in bonuses to 17 executives, 25 director-level employees, and additional 'key' employees. The Trustee contended the measure was premature, given the closing of 228 stores and loss of jobs to thousands of employees. The Court allowed bankrupt Borders Group Inc to pay $6.6 million in executive bonuses if the company is sold.
Ultimate Acquisition Partners LP and CC Retail LLC: Filed for Chapter 11 bankruptcy protection on January 26, 2011. Ultimate Acquisition filed with the US Bankruptcy Court on April 29, 2011 a motion to convert the Chapter 11 reorganization case to Chapter 7 liquidation status.
Rugged Bear Co: Filed for Chapter 11 on January 25, 2011. All intellectual property assets bought by TRB Acquisitions LLC on April 12, 2011.
Appleseed's Intermediate Holdings LLC: and its domestic subsidiaries, which do business in US as Orchard Brands: Filed for Chapter 11 on January 19, 2011. US Bankruptcy Court confirmed the company's Plan and Orchard Brands exited bankruptcy on April 25, 2011.
Anchor Blue, Inc. and it's parent Anchor Blue Holding Corp.: filed for Chapter 11 on January 11, 2011 in Delaware. The company is liquidating. Perry Ellis International, Inc. completed the purchase of all intellectual property assets of Anchor Blue, Inc. for $500,000. The company acquired the Anchor Blue and Miller’s Outpost trademarks, and all other intellectual property holdings associated with Anchor Blue, Inc.
Great Atlantic & Pacific Tea Co.: Filed for Chapter 11 on December 12, 2010. Filed motion on February 16, 2011 to close 32 stores as part of reorganization. Filed motion seeking approval to extend the periods during which the Debtors have the exclusive right to file a Chapter 11 Plan and solicit acceptances thereof until December 31, 2011 and February 29, 2012, respectively. Group of creditors filed a motion seeking appointment of an official committee of direct store delivery and trade creditors. A&P filed a motion on April 13, 2011 seeking Bankruptcy Court approval of bidding procedures to market and sell 25 Superfresh stores in Maryland, Delaware, and the District of Columbia to be completed by mid-June. The Company continues to operate 395 stores.
Rosa's Home Stores: Filed for Chapter 11 bankruptcy on December 9th, 2010.
Boutique Jacob Inc.: Filed for protection under the Companies' Creditors Arrangement Act in the Quebec Superior Court November 18, 2010.
Lacks Stores, Incorporated: Filed Chapter 11 at the U. S. Bankruptcy Court for the Southern District of Texas on November 16, 2010 and is currently liquidating its inventory. The company hired a Realty Co to dispose of its stores and warehouse facilities.
Loehmann's: Filed Chapter 11 in the US Bankruptcy Court at the Southern District of New York on November 15, 2010. Emerged from bankruptcy on March 1, 2011. It secured $45 million in exit financing from Wells Fargo Bank, N.A. and Whippoorwill Associates, Inc. As part of the Plan, the Company received a $25 million capital infusion through a rights offering to its Class A Noteholders that was backstopped by Istithmar World and Whippoorwill Associates, Inc. The restructuring eliminated all $110 million of the Company's long-term bond debt, $14 million in related annual interest, $23 million in other cost reductions, and recapitalized the balance sheet through the exchange of notes for common stock. Loehmann's also announced that CEO Jerald Politzer has chosen to leave the company, replaced by COO and CFO Joe Melvin as Interim CEO.
Blockbuster: Filed Chapter 11 on September 23, 2010. Creditors won approval to investigate the liens of senior noteholders and former board member Carl Icahn on November 23, 2010. Blockbuster filed with the US Bankruptcy Court a motion seeking to extend for the second time the exclusive period that the company can file a Chapter 11 Plan and solicit acceptances thereof through and including August 19, 2011 and October 18, 2011, respectively. Blockbuster requested more time to formulate a Chapter 11 plan following the implementation of the bid procedures and the consummation of its $290 million asset sale to Cobalt Video Holdco LLC (a limited liability company formed by funds managed by Monarch Alternative Capital LP, Owl Creek Asset Management LP, Stonehill Capital Management LLC and Varde Partners, Inc.). The Court scheduled an April 21, 2011 hearing on the matter then subsequently signed a bridge order extending the exclusive period to the date that the Court enters an order determining the motion. Blockbuster sold at auction on April 5, 2011 for about $320 million to Dish Network Corp. The Court approved the deal on April 7, 2011. The Court approved Blockbuster's motion to extend the exclusive period during which the Company can file a Chapter 11 plan and solicit acceptances thereof through and including August 19, 2011 and October 18, 2011. In its motion, the Company told the Court it needed this exclusivity extension '...to provide an opportunity for them to formulate a chapter 11 plan following the implementation of the Bid Procedures and the consummation of the Sale.'
Oriental Trading Company: Filed Chapter 11 on August 25, 2010 in Wilmington, DE. Completed its reorganization efforts and exited from bankruptcy on Feb 14, 2011 with a significantly improved capital structure and strong liquidity, having reduced its debt by nearly 70%.
Gracious Home: Filed Chapter 11 on August 13, 2010 in Manhattan, NY and was sold to American Retail Flagship Fund, LLC, effective December 3, 2010.
Jennifer Convertibles Inc.: Filed Chapter 11 on July 18, 2010 in Manhattan, NY. Emerged from bankruptcy on February 23, 2011.
Controladora Comercial Mexicana, S.A.B. de C.V.: Filed Chapter 15 on July 16, 2010 in the Southern District of New York and a Mexican Judge accepted their insolvency petition. They hope to finishing restructuring by the end of 2010.
Riviera Holdings Corporation: Filed Chapter 11 on July 12, 2010 in Las Vegas, NV. Filed its reorganization plan and emerged from bankruptcy on November 17, 2010.
Rock & Republic: Filed Chapter 11 on April 1, 2010 in New York, NY. It plans to reorganize.
Movie Gallery, Inc.: Filed Chapter 11 in Virginia on February 2, 2010. It liquidated all of its stores.
Station Casino's: Filed Chapter 11 on July 28, 2009 in Las Vegas, Nevada and is reorganizing.
Bashas' Inc.: Filed Chapter 11 on July 12, 2009 in the US Bankruptcy Court in Phoenix, AZ and emerged from bankruptcy on August 28, 2010.
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